8/11/2019 68e10 MMTimes Competition Bill

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The Fine Print, Legal & tax insight: A look at the Competition Bill

By Sebastian Pawlita and Thitsar hine ! S"nday, #$ %"ne #$'

According to the Constitution of 2008, the Union must preventacts that injure public interest through monopolization ormanipulation of prices by an individual or group ith intent toendanger fair competition in economic activities!" #he 20$%#elecommunications &a contains a chapter on anti'competit ivepractices in the telecom sector" (o ever, there is no general laprohibiting unfair competition and the abuse of monopolies as of

today"The dra(t o( a )ompetition law *+Competition Bill -, p"blished on .ay $$,

#$', will, i( ena)ted, )hange this/ 0n line with similar legislation in other 1"risdi)tions, it prohibits a)ts o( "n(air )ompetition and the )reation o(monopolies thro"gh ab"si2e means/ 0t introd")es a )ontrol me)hanism

whereby mergers and a)3"isitions re3"ire the appro2al o( a newly (ormed)ompetition )ommission/

0( the bill is ena)ted as dra(ted, the go2ernment m"st (orm a )ompetition)ommission )harged with, amongst others, in2estigating s"spe)ted a)ts o("n(air )ompetition, spe)i(ying thresholds )onsidered to indi)ate amonopoly, and ordering enterprises monopolising the market to red")etheir market share/

The )ommission m"st, in t"rn, (orm an en3"iry )ommittee with the powerto s"bpoena witnesses and experts, sear)h b"ildings and premises and)on(is)ate e2iden)e a))ording to the dire)tions o( the )ommission/

The bill, i( ena)ted, will prohibit entreprene"rs (rom )reating monopolies by )ontrolling pri)es, ind")ing a s)ar)ity o( s"pply, or restri)tingopport"nities to b"y and sell/ A merger )ontrol )la"se will prohibit mergersand a)3"isitions, 1oint 2ent"res and other (orms o( )ollaboration i( thesea)ts wo"ld lead to one )ompany )ontrolling more than 4#p) o( the marketor a gro"p o( )ompanies )ontrolling more than 5#675p)/

The bill lists spe)i(i) a)ts o( "n(air )ompetition/ Amongst others,entreprene"rs are prohibited (rom de)ei2ing )ons"mers by "sing names,logos or other identi(ying )hara)teristi)s o(

)ompetitors/

The bill ("rthermore prohibits the "na"thori8ed "se or re2elation o( b"siness se)rets o( )ompetitors as well as the brea)h o( se)"rity meas"resand the pers"asion o( employees o( a )ompetitor in order to obtain a

b"siness se)ret/ Spe)ial prote)tion is a))orded to b"siness se)rets o( state6owned organisations/

The bill prohibits the +b"llying and threatening o( )ons"mers and)ompetitors/ F"rthermore, entreprene"rs m"st not "se (alse in(ormation inorder to de(ame )ompetitors, or inter(ere with other b"sinesses whi)h are)arried o"t in a))ordan)e with the law/

The bill also prohibits "n(air and de)epti2e ad2ertising meas"res and salespromotions/ 0n parti)"lar, entreprene"rs m"st not )ompare their goods orser2i)es with similar goods or ser2i)es o( (ered by )ompetitors, imitateother ad2ertisements, or gi2e misleading in(ormation regarding the pri)e,amo"nt, 3"ality or other )hara)teristi)s o( the goods/

+9is)riminatory pra)ti)es an example wo"ld be a boy)ott are likewiseprohibited "nder the bill/ F"rthermore, entreprene"rs m"st not sellprod")ts at a pri)e below prod")tion )osts i( their intent is to red")e the

)ompetiti2eness o( other b"sinesses/

;ntreprene"rs with a dominant position in the market are prohibited (romab"sing it: 0n parti)"lar, they m"st not impose "n(air terms and )onditionson their b"siness partners, o((er di((erent terms and )onditions in similar

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8/11/2019 68e10 MMTimes Competition Bill

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)ir)"mstan)es, or )a"se harm to )ons"mers by demanding "nreasonablepri)es or restri)ting prod")tion or distrib"tion le2els/

The )ommission may also de(ine other pra)ti)es )onsidered "n(air)ompetition/

The )ommission has the power to impose administrati2e san)tions*warning, administrati2e (ine, s"spension o( the b"siness (or a limitedperiod o( time, bla)klisting- on non6)ompliant entreprene"rs/

F"rthermore, non6)omplian)e may, a))ording to the bill, lead toimprisonment o( "p to 5 years and a (ine o( "p to 7 million/ The bill doesnot deal with )i2il s"its by )ompetitors or )ons"mers/

Sebastian and Thitsar are consultants with Polastri Wint & Partners Legal & Tax Advisors.